Stable balance sheet with total assets of CHF 1,356 billion and stable risk-weighted assets of CHF 209 billion on 31 March 2010; FINMA leverage ratio of 4.1% in first quarter 2010 compared with 3.9% in fourth quarter 2009

CEO comment and outlook

Zurich/Basel, 4 May 2010 - Commenting on UBS's first quarter 2010 results, Group CEO Oswald J. Grübel said: "We are well positioned to meet our medium-term goals. We implemented the measures announced in 2009 and delivered a good profit while managing our costs and using our balance sheet and risks in a disciplined way."

First quarter 2010 profit of CHF 2,202 million

UBS reports a first quarter net profit attributable to UBS shareholders of CHF 2,202 million compared with CHF 1,205 million in fourth quarter 2009.

Wealth Management & Swiss Bank's pre-tax profit was up 5% to CHF 1,161 million in the first quarter from CHF 1,109 million in the fourth quarter. The pre-tax profit for the Wealth Management business unit increased 3% to CHF 696 million from CHF 674 million as an increase in operating income was partly offset by higher accruals for variable compensation. Annualized gross margin in Wealth Management increased 5bps to 93bps in the first quarter, up from 88bps in the previous quarter. The pre-tax profit for the Retail & Corporate business unit increased 7% to CHF 465 million from CHF 435 million, principally due to credit loss recoveries.

Wealth Management Americas recorded a pre-tax profit of CHF 15 million in the first quarter compared with CHF 178 million in the prior quarter. Revenues were down 2%, mainly reflecting a CHF 35 million interest credit recorded in fourth quarter 2009. The first quarter result included an increase in financial advisor deferred compensation awards and the introduction of a new compensation program for financial advisors. The first quarter was also impacted by increased charges from the Corporate Center and restructuring charges related to staff reductions.

Global Asset Management's pre-tax profit was CHF 137 million in the first quarter compared with CHF 284 million in the fourth quarter on slightly lower income and higher personnel expenses.

The Investment Bank recorded a pre-tax profit of CHF 1,190 million in the first quarter compared with CHF 297 million in the prior quarter. This improvement was largely due to a strong performance in the fixed income, currencies and commodities (FICC) business. FICC revenues increased significantly to CHF 2,165 million from CHF 496 million, as performance improved across all FICC businesses, credit in particular. Equities revenues increased 32% to CHF 1,255 million from CHF 948 million. Total revenues for the investment banking department decreased 19% to CHF 604 million from CHF 746 million, as the fee pool decreased due to less client activity compared with the seasonally strong fourth quarter. The first quarter included an own credit charge of CHF 247 million on financial liabilities designated at fair value. The Investment Bank recorded a net credit loss recovery of CHF 112 million, compared with a net credit loss expense of CHF 70 million. Operating expenses increased due to higher accruals for variable compensation.

The pre-tax result from Treasury activities and other corporate items was a pre-tax profit of CHF 306 million in the first quarter compared with a pre-tax loss of CHF 956 million in the fourth quarter. First quarter 2010 included a gain of CHF 231 million on the revaluation of UBS's option to acquire the SNB StabFund's equity. Fourth quarter 2009 included a charge of CHF 690 million related to reallocation of negative revenues from prior periods that resulted from a revised approach to the calculation of own credit. First quarter 2010 results include a tax charge of CHF 603 million compared with a tax credit of CHF 480 million in the previous quarter.

Business division performance: 1Q10 vs 4Q09

Reporting by business division

Net new money and invested assets

Wealth Management - Net new money outflows were CHF 8.0 billion in first quarter 2010 compared with CHF 32.9 billion in fourth quarter 2009. The reduction reflects actions taken by management to stabilize client flows as well as a reduction in special effects such as the Italian tax amnesty, which had a material effect in the fourth quarter. Net new money in Europe remained negative but at a significantly lower level and a number of locations recorded net new money inflows. Moreover, first quarter 2010 saw continued net new money inflows in the Asia Pacific region, and net new money turned positive in this quarter in the ultra high net worth segment. Total net outflows from Swiss wealth management were CHF 1.2 billion, down from CHF 1.7 billion in fourth quarter 2009. For International wealth management, net new money outflows improved considerably to CHF 6.8 billion from CHF 31.2 billion.

Wealth Management Americas - Net new money outflows were CHF 7.2 billion in first quarter 2010 compared with CHF 12.0 billion in fourth quarter 2009. Though net new money remained negative, outflows related to financial advisor attrition decreased. Net new money from financial advisors employed with UBS for more than one year was positive for the first time since first quarter 2008.

Global Asset Management - Net new money inflows from third parties of CHF 2.1 billion were more than offset by net outflows of CHF 4.7 billion from clients of UBS's wealth management businesses in the first quarter. Total net new money outflows decreased to CHF 2.6 billion from CHF 11.0 billion. Excluding money market flows, net new money outflows decreased to CHF 1.6 billion from CHF 5.7 billion.

Invested assets were up 2% to CHF 2,267 billion on 31 March 2010 compared with CHF 2,233 billion on 31 December 2009. The growth was due to favorable market performance and positive currency effects that were partly offset by net new money outflows. Of the invested assets CHF 963 billion were attributable to Wealth Management & Swiss Bank (CHF 827 billion thereof attributable to Wealth Management and CHF 136 billion attributable to Retail & Corporate); CHF 714 billion were attributable to Wealth Management Americas; and CHF 590 billion were attributable to Global Asset Management.

UBS maintained a stable balance sheet with total assets of CHF 1,356 billion on 31 March 2010, up 1% from 31 December 2009. UBS's FINMA leverage ratio improved to 4.1% in first quarter 2010 compared with 3.9% in fourth quarter 2009.

Outlook

UBS expects securities trading markets activity in the second quarter to be generally in line with the first quarter, although concerns relating to European sovereign debt provide a basis for some market uncertainty. Banking markets should however continue their recovery, benefiting UBS's lending and financial advisory businesses. Operational improvements implemented last year should have a positive effect on UBS's results going forward. UBS accordingly expects gradual improvement in wealth management and asset management results, subject to market conditions. Net new money outflows are expected to be at relatively moderate levels in the near term, although UBS continues to believe that the steps taken to deal with the root causes of the net outflows will be effective. Invested assets, which more directly affect revenues, are subject to market movements but are expected to remain broadly stable.

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Cautionary Statement Regarding Forward-Looking Statements This release contains statements that constitute “forward-looking statements,” including but not limited to management’s outlook for UBS’s financial performance and statements relating to the anticipated effect of transactions and strategic initiatives on UBS’s business and future development. While these forward-looking statements represent UBS’s judgments and expectations concerning the matters described, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from UBS’s expectations. Additional information about those factors is set forth in documents furnished and filings made by UBS with the US Securities and Exchange Commission, including UBS’s financial report for first quarter 2010 and UBS’s Annual Report on Form 20-F for the year ended 31 December 2009. UBS is not under any obligation to (and expressly disclaims any obligation to) update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.

Rounding Numbers presented throughout this release may not add up precisely to the totals provided in the tables and text. Percentages and percent changes are calculated based on rounded figures displayed in the tables and text and may not precisely reflect the percentages and percent changes that would be derived based on figures that are not rounded.